How Will Fed Policy Affect Precious Metals?

9/18/2013 10:45AM

Fed policy will have a pronounced impact on the precious metals market, regardless of how much the central bank chooses to taper its bond-buying program this week. Lear Capital CEO Scott Carter joins MoneyBeat. Photo: AP.

This transcript has been automatically generated and may not be 100% accurate.

... it is Wednesday September a team and what are we doing on the market today with everyone knowing when to see what the Federal Reserve does a two pm today ... policy statement expected in the stocks this morning ... down a little bit worried that ... the holding pattern waiting to see what is that what the Fed does this afternoon the big story in the markets today ... you will obviously have an impact on markets everywhere not just here in the U S but even overseas for all we focus alot on on equities is going to affect other markets of all bonds obviously but also the metals market gold and silver ... regardless of how much the Central Bank chooses to taper its bond buying program this week ... we are Capital CEO Scott Carter joins us this morning from Los Angeles to talk about this ... so Scott and really only talk about equities a lot in equities reacting in the avian very fast market ... the one you looking at when you look at gold and silver what are you looking at when you think about this Fed meeting this afternoon ... well certainly it will be an important ... steps are sometimes met in a way ... makes the dollar stronger and a gold and silver is priced in dollars so ... the fact that there's been so much liquidity has been a component of white gold and silver performed well ... so there is a modest tightening there might be short-term impact but I think the reality is that ... that the Fed is still providing seventy five billion dollars a month even after a taper in its estimated ten billion seventy five billion a month ... liquidity and that's gotta be bullish for the metals market as well as equity ... but that's assuming that they cut ten billion out of bond buying with what most people think ... it will be around ... not gotten very interesting story right and he was flying was doing spectacularly ... it has fallen sharply we saw that the furnace second up to around thirteen hundred ... has it stabilized around thirteen hundred ... in my view it as it drop down to twelve seventy twelve maybe there's a lot of resistance and you will or lunch reported that level ... and they're still lot some of ... actions be had on the outside ... I think everybody's and we see though the Fed doesn't want the economy is going for ... gold as a diversification strategy has been a great component ... because the liquidity higher interest rates and a slowing economy as well as ... debt issues have been bullish for gold and silver and ... that seems to be what were expanded into the mix for five years so that's why ... they're still lot of bulls out there gold and silver ... a cafe ... a lot of people thought and the Fed and not without reason ... that when the Fed is printing this much money when the Fed is is doing this much stimulus ... that is inflationary when you look especially the United States and even overseas ... there's very little inflation going through the pipeline ... that I have to think that her golden somewhere doesn't it ... to some extent then there's two reasons ... one how we measure it is important I need ... a bit of a person knows that inflation is that gas is tired and was fine till mill ... all those things that can energy are excluded in the inflation cut to its basically everything we need to see in Le so inflation is out there and our dollar is not by as much as they did five years ago ... but ... more important thing is that a lot to be ... the the stimulus money is still sitting on the bank's balance sheet meeting it has been put into the economy ... if they start to put that into the economy to try to force growth ... then I think you can see inflation Sekoff and that will be bullish for gold silver as well ... leave it that step father thank very much for a fifth time today ... but for ... me